Question

Use the following information to answer questions 1 through 4:

The table below shows data for the production of Apples for an individual firm operating as a monopoly.

Quantity of Apples	Price	Total Costs
0	600	3000
10	550	3750
20	500	4750
30	450	6000
40	400	8500
50	350	12500
60	300	20000
70	250	32000
80	200	43500

1. Given this data, complete the table:

Quantity of Apples	Total Revenue (TR)	Profit	Marginal Revenue (MR)	Marginal Costs (MC)
0			-	-
100
200
300
400
500

2. At what quantity are marginal revenues equal to marginal costs

3. What is the profit-maximizing quantity?

NOTE: If there are two quantities with the same level of profits, pick the larger of the two quantities!

4. What is the profit-maximizing price?

NOTE: If there are two quantities with the same level of profits, pick the larger of the two quantities!

Answer 1

Q	P	TR=(P)(Q)	MR= (Change in TR / Change in Q)	TC	MC=(Change in TC/ Change in Q)
0	600	0	-	3000	-
10	550	5500	550	3750	75
20	500	10000	450	4750	100
30	450	13500	350	6000	125
40	400	16000	250	8500	250
50	350	17500	150	12500	400
60	300	18000	150	20000	750
70	250	17500	-50	32000	1200
80	200	16000	-150	43500	1150

2. At Q= 40 , MR=MC=250.

3. Profit-maximizing quantity is Q=40 apples  where MR=MC.

4. Profit-maximizing price = $400 .